Argument analysis: Subdued justices parse immunity law

Posted Mon, December 4th, 2017 11:35 pm by Amy Howe

These days, the Supreme Court is known as a “hot bench”: Lawyers who argue there usually have to respond to a barrage of questions from all sides. That fast and furious questioning can make it hard for advocates to advance their arguments, but it also makes it easier for both the attorneys and spectators to figure out what the justices care about, and how they might rule. The flip side of this is that when the justices are quieter, the advocates have more time to talk, but it’s harder to know what the justices are thinking.

The latter scenario was on display this morning at the Supreme Court, when the justices heard oral argument in Rubin v. Islamic Republic of Iran. The case is the latest chapter in efforts by American victims of a series of suicide bombings in Jerusalem in 1997 to recover a $71.5 million default judgment from the Islamic Republic of Iran for its role in providing support to Hamas, the terrorist group that claimed responsibility for the blast. After approximately 45 minutes of oral argument, the justices seemed likely to rule against the victims, but their relative silence made it difficult to know for sure.

Today’s case centers on the interpretation of the Foreign Sovereign Immunities Act, a federal law that carves out several narrow exceptions to the general rule that foreign countries cannot be sued in U.S. courts. One of those exceptions is known as the “terrorism exception”: It allows private citizens to bring lawsuits against countries that have been designated as state sponsors of terrorism. Another provision of the FSIA, Section 1610(g), provides that when a judgment is entered against a foreign state under the terrorism exception, both the state’s property and the property of its “agencies or instrumentalities” – that is, organizations or companies owned by the state –can be transferred to the prevailing party, without having to consider five different factors related to the foreign government’s control over the property.

Representing the victims at the Supreme Court today, attorney Asher Perlin told the justices that in 2008, Congress overhauled the FSIA terrorism exception to close a gap that had allowed state sponsors of terrorism to “thumb their noses” at U.S. judgments holding them liable for terrorism. Section 1610(g), Perlin asserted, was the “centerpiece” of that overhaul: It allows victims of terrorism to seize the property of either a foreign state or its agencies or instrumentalities, without having to satisfy any of the other conditions imposed in Section 1610 to “pierce the veil” separating a foreign state from such an organization or company.

Several justices were skeptical, however, that this interpretation was what Congress intended. Instead, Justice Ruth Bader Ginsburg suggested, Congress enacted Section 1610(g) to allow plaintiffs like the victims in this case to overcome the presumption that a judgment against a foreign state cannot be enforced against that state’s agencies and instrumentalities. The provision, she posited, “does so perfectly,” making more assets available for plaintiffs. But it doesn’t say anything about immunity, she observed.

Justice Sonia Sotomayor appeared to agree. She observed that in at least three cases seeking to seize the assets of a foreign state’s agency or instrumentality, the plaintiffs could not recover because there wasn’t a sufficiently close relationship between the state and agency or instrumentality. “So there was a real issue,” she concluded, that Section 1610(g) was addressing.

Justice Samuel Alito asked Perlin to explain what role another phrase in Section 1610(g) – which allows the property at issue to be seized “as provided in this section” – would play under his interpretation.

Perlin responded that the phrase was intended to signal that Section 1610(g) only applies to judgments entered under the terrorism exception, and it also extends the remedies available to plaintiffs in such cases, including punitive damages. But Alito appeared unconvinced, telling Perlin that the phrase was really “superfluous” under his reading.

The justices allowed Perlin to speak at some length without interruption. Among other things, he emphasized exactly what is at stake in the case. “My clients,” he told the justices, “have been waiting 20 years to enforce their judgment against Iran. But “Iran doesn’t pay judgments,” he said. “Congress finally said ‘enough is enough’” and created a “tool” to allow victims like his clients to enforce their judgments.

Arguing on behalf of the University of Chicago, where the ancient Persian artifacts that the victims are trying to seize are housed, attorney David Strauss agreed that – as Perlin had argued – the history of Section 1610(g) indicated that Congress had intended to “eliminate barriers” facing victims of state-sponsored terrorism. But Strauss parted ways with Perlin at that point, emphasizing that Congress sought to remove those barriers by “changing the legal standards” for piercing the veil between a foreign state and its agencies or instrumentalities. And the phrase “as provided in this section,” Strauss asserted, means that even victims of state-sponsored terrorism must still satisfy the other requirements to seize property under Section 1610 – specifically, that the foreign state use the property for commercial activity in the United States. The justices allowed Strauss, even more than Perlin, to speak at length, and he sat down early.

Representing the United States, which filed a “friend of the court” brief in which it urged the justices to affirm the narrower interpretation of Section 1610(g) advanced by the University of Chicago and Iran, Assistant to the Solicitor General Zachary Tripp faced even fewer questions than the advocates who went before him and sat down after having used less than half of his 10 minutes. Tripp made clear that the United States “has a very strong interest in combatting state-sponsored terrorism.” But at the same time, he added, the federal government also has concerns about how its own property overseas will be treated if the court rules for the victims in this case. “Particularly in light of those concerns which are quite weighty,” Tripp emphasized, “if Congress was really going to take the step of allowing execution against property of a cultural and historical significance to another country and its people, that would be a big deal and it would not be the kind of thing you would expect to see buried in a conforming amendment without remark.”

It’s hard to know what to make of the relative dearth of questions today. Sometimes a quiet bench can mean that the justices agree with the arguments being made, but other times it can signal that the justices have already made up their minds and don’t feel that additional questions will be useful. At today’s argument, the justices seemed more skeptical of the victims’ interpretation than the university and Iran’s, but we won’t know for sure until the court issues its opinion sometime next year.

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